This syndicated post originally appeared at Zeus Kerravala's blog.

As I mentioned in my last posting, Cisco held its annual Partner Summit reseller conference in San Diego last week. While the overall tone of the conference was positive, there was one issue that I felt was worth bringing up, as it could have some long-term impact on Cisco and its channel.

I was sitting in the audience prior to the keynote and, looking at the stage, I saw a big rack that said “VBLOCK” on the side. So, I thought to myself that a demo was coming (of which there was a very good one). I’ve been talking to channel partners about VBlock since its launch a couple of years ago and there appears to be two schools of thought. Some partners, and I would say the majority of them, like VBlock. They can go from nothing to a fully functioning cloud in the better part of two days. Other partners, though, look at VBlock as a big threat to their business.

The channel partner who sat beside me in the audience said to me that their organization does a considerable amount of integration work getting all the components of cloud to work together. VBlock threatens that business as the integration and testing have all been done. In theory, a platform like VBlock is supposed to allow the partner to move away from basic rack and stack and integration services and move more into applications and focusing on helping businesses transform themselves. As one of the partners at the summit told me, “Cisco wants us to focus more on blinking cursors than blinking lights,” with blinking cursor reference being an application-based focus.

I completely understand why Cisco partners might find something like VBlock or Flexpod threatening to their business. It takes away what was once a very lucrative business. I also understand the hesitation to move “up the stack” as many partners don’t have those kinds of skills in house. However, in both cases, I think the partners that resist are wrong. This is the direction the industry is heading. Cisco has VBlock and Flexpod, EMC just rolled out VSPEX and HP and Dell are both building integrated solutions.

Whether the channel partners like it or not, the industry is moving that way. I liken this to the transition that the voice industry went through where traditional voice interconnects refused to believe that VoIP was coming and focused on moving phones and installing PBX line cards. In the blink of an eye many of them went the way of the mainframe administrator. There are a few still around, but they’re dinosaurs. The same thing holds true here – make the change or fall behind.

The risk to Cisco here is that either they coddle the channel partners too much and allow them to do things the old way until another company comes in and grabs the business, or the channel partner gets nervous and bolts to a competitor that allows them to focus on the legacy. Obviously, with the latter situation, the impact to Cisco isn’t as bad since that channel partner wasn’t focused in the right area, but it could cause some short-term disruption.

The best thing Cisco can do is arm the partners with the right tools on how to transform their businesses and then push them into doing so by providing best practices and certifications focused in the areas that “new IT requires.”

There’s a major sea change going on with IT and Cisco and its partners need to navigate quickly through these waves to come out on top. It seems Cisco and many of its partners are ready, it just needs to provide the right tools and incentives to help the ones that aren’t.

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Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.
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